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Budget 2020: Business rates

Pressure on Holyrood to match rates exemption

Stockbridge shops

Small retailers in Scotland must await the government’s response

Scottish government ministers were under pressure to match a huge cut in business rates for thousands of hospitality, retail and leisure businesses in England.

The UK government manifesto had previously pledged to increase discounted rates for shops, cinemas, and restaurants with a rateable value of less than £51,000 to 60%.

Chancellor Rishi Sunak announced in his Budget that those businesses – and many more – will now pay no rates for the next financial year.

However, because business rates are devolved to Scotland it remains to be seen what the Scottish Government decides to do and how matching the pledge will impact on its finances.

David Lonsdale, director of the Scottish Retail Consortium, said: “Many of the measures to support businesses will only affect English businesses.

“We hope to see a swift announcement from the Scottish Government on how they will allocate a portion of the very significant Barnett Consequential revenues to support businesses facing a very difficult few months.

“Scottish Ministers have taken a number of steps to limit business rate rises in Scotland – today’s Budget provides an opportunity to go even further.”

David Lonsdale

David Lonsdale: opportunity (pic: Terry Murden

Liz Cameron, chief executive of the Scottish Chambers of Commerce said: “We call on the Scottish Government… to consider suspending rates bills for retail, leisure and hospitality firms in Scotland as the UK Government have announced.’”

Announcing the benefit during his speech, Mr Sunak said: “Museums, art galleries, and theatres; caravan parks and gyms; small hotels and B&Bs; sports clubs, night clubs; club houses, guest houses. They would not benefit from today’s measure – but they could be some of the hardest-hit.

“So, for this year, I have decided to extend the 100% retail discount to them as well.

“That means any eligible retail, leisure or hospitality business with a rateable value below £51,000 will, over the next financial year, pay no business rates whatsoever.

“That is a tax cut worth over £1bn, saving each business up to £25,000.”

The British Retail Consortium welcomed support for smaller retailers but said the bulk of rates are paid by larger firms.

“Despite announcing his support for British business, the Chancellor has failed to provide any relief for larger retailers, who employ the majority of the industry’s three million workers and currently foot most of the industry’s £7.5bn business rates bill.

“In April, these retailers will face yet another rise in business rates across England, piling on even more pressure on shops at a time when they are squeezed by lower demand and increasing costs arising from coronavirus.”

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